Payday lender Cash Genie will refund or write off £20million after shocking practices are exposed including charging customers £30 to get their own money back 

  • Customers charged more interest than agreed and paid excessive fees
  • City watchdog orders Cash Genie to pay back £10m and write off £10m
  • Owners have decided to pull out of more regulated UK payday loan market

By Martin Robinson for MailOnline

Published: | Updated:

A payday lender has today agreed to refund or write-off £20million relating to 92,000 customers after ripping them off, it was announced today.

Cash Genie charged people £30 to get their own money back when it was taken without permission and levied a higher rate of interest than promised, the city watchdog has said. 

The Financial Conduct Authority (FCA) also found other unfair charges included a £50 fee to transfer customers to a sister debt collection firm. 

Redress: Cash Genie will pay back £10million and write off £10million more after a series of unfair practices were exposed

Redress: Cash Genie will pay back £10million and write off £10million more after a series of unfair practices were exposed

Cash Genie notified the FCA in June last year that it had engaged in unfair practices and subsequently agreed to an independent review of its past business and to carry out a redress scheme.

It has now agreed to provide £10million in redress and has already written off £10.3 million of fees and interest.

Linda Woodall, acting director of supervision for retail and authorisations at the FCA, said: 'We have been encouraged that Cash Genie has been working with us proactively and openly to put things right after these issues were reported.

Boss: Cash Genie's US-based parent company EZCORP, led by Stuart Grimshaw, announced last year it was shutting down its UK payday lending business

Boss: Cash Genie's US-based parent company EZCORP, led by Stuart Grimshaw, announced last year it was shutting down its UK payday lending business

'Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing.

'We expect all firms to notify us of any unacceptable past or current practices and provide appropriate redress to anyone affected.'

Failings outlined by the FCA - dating back to the launch of Cash Genie in September 2009 - also included loans being refinanced or rolled over without customers' request or consent and without undertaking appropriate checks.

Ariste Holdings, the company behind Cash Genie, also traded as www.txtmecash.co.uk and www.paydayiseveryday.co.uk.

The FCA said banking information provided to these websites had been used to take payment for existing Cash Genie loans without customers' informed consent.

It also said Cash Genie failed to send annual statements to customers who had not repaid their loans after 12 months, meaning that it should not subsequently have applied further fees or interest to accounts.

The FCA said the lender had agreed to write-off or refund fees and charges which should not have been added to accounts as well as 'rollover' interest where loans had been rolled over - extending the time period of the loan - inappropriately.

It is also refunding payments taken without authorisation and writing off outstanding balances on accounts affected by this practice, as well as writing off or refunding interest and fees added to accounts after an annual statement should have been given.

The firm aims to contact all affected customers by September 18.

Cash Genie stopped offering new loans to customers last September. 

US-based parent company EZCORP said in October that the firm would exit the UK payday lending market in 2015 as part of its new business strategy.

Redress due under the latest announcement relates to a period before a price cap for high-cost short term credit was introduced at the start of this year.

 

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